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Charging the Inside Tax Rate with Respect to Property in One City in the County and the Outside Rate with Respect to Property in Another City in the County

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Reviewed Date: October 24, 2016

Original Author: 
Hemsley, Sid
Date Created: 
Jan 7, 1992


Subjects:
Tax rates--County
Tax rates--Municipal
Tax collection

Charging the Inside Tax Rate with Respect to Property in One City in the County and the Outside Rate with Respect to Property in Another City in the County

Summary: 
MTAS was asked whether the county can charge the inside tax rate with respect to property in one city in the county, and the outside rate with respect to property in another city in the county.

Knowledgebase-Charging the Inside Tax Rate with Respect to Property in One City in the County and the Outside Rate with Respect to Property in Another City in the Countyspelling error - nieghboring should be neighboring January 7, 1992

Your question in essence is whether the county can charge the inside tax rate with respect to property in one city in the county, and the outside rate with respect to property in another city in the county. The question arose from the following facts:

- The City is the only incorporated municipality wholly within the County.

- City property owners pay the inside tax rate.

- A neighboring city, located in the next county, recently annexed territory in that County in which certain business property is located.

- A question has arisen over whether the business property in the portion of the nieghboring city located in your County is subject to your County's inside or to its outside tax rate.

I asked the MTAS attorney in west Tennessee, Mark Pullen, to research your question. His excellent memorandum to me concludes--correctly, I believe--that the inside tax rate would have to apply to all municipal territory within the County. Although none of the cases cited involve precisely the facts presented in your question, they definitely support his conclusion. I am enclosing it and the cases and the Tennessee Attorney General's opinions he included which support it. It is generally supported, as well, by other less pertinent cases involving uniformity of taxation, including Bell v. Town of Pulaski, 184 S.W.2d 384 (1939), Corporation of Sevierville v. King, 184 S.W.2d 381 (1939) and Graham v. Spivey, 133 S.W.2 460 (1939).

If I can help you further in this or any other matter, please let me know.

Sincerely,

Sidney D. Hemsley
Senior Law Consultant
SDH/


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